Image

£30 billion ‘High Street Voucher’ scheme proposed to kickstart Britain’s recovery

A think-tank is calling on the Government to provide UK citizens with high-street vouchers.

The Resolution Foundation is an independent think-tank who say their main focus is to “improve the living standards of those on low-to-middle incomes.”  The Foundation conducts analytical research on living standards in the UK, working across a wide range of issues with a specific focus on the experiences of low to middle income households, or those with incomes below the median.
Following research published by the Foundation, the think-tank are proposing a scheme whereby the Chancellor would provide every household in the UK with “High Street Vouchers,” worth £500 per adult and £250 per child.  The Foundation believe that this spending boost will kickstart the economic recovery, and provide a controlled industry spend – rather than a general cash credit.
The Foundation explains:
“Cash transfers risk simply being saved by higher income households, who are already boosting their balance sheets through ’enforced savings’. A VAT cut meanwhile would do less for lower income households, whose finances are most likely to constrain their consumption, because they tend to spend more of their income on VAT exempt, reduced, or zero-rated  goods.”
In their report, the Foundation propose that relevant credit should therefore be delivered to each person as physical vouchers or smartcards – which are activated over a fixed time period (they propose 12 months).  These vouchers would only be valid to be spent in businesses that have been hardest hit by the coronavirus pandemic – such as hospitality, leisure and retail.
The Foundation believes their voucher scheme proposal is tailor-made for the nature of the current crisis – which is focused on specific sectors, rather than spread across the whole-economy.

The proposal, which forms part of wider fiscal stimulus package put forward by the Foundation, would involve the delivery of up to £30 billion worth of consumption vouchers.

James Smith, Research Director at the Resolution Foundation, said:

“While every part of the economy has been affected by the current crisis, the stand out feature of this recession is that some areas are far more affected than others.

“Social distancing has huge implications for firms in sectors like retail, hospitality, tourism and leisure that will last into the forthcoming reopening phase. That is why the jobs of so many workers in these sectors are in the firing line. The Chancellor’s recovery package on Wednesday should reflect this unique economic challenge.

“As well as setting out the biggest ever peacetime job support programme, the Chancellor should get Britain spending in places where it’s needed most. A universal ‘High Street Voucher’ scheme – worth £500 per adult and £250 per child – to be spent only in these sectors would kickstart demand in the right parts of our economy, boost living standards and deliver targeted support to the businesses that need help the most.

“The Chancellor has already shown that big, bold measures like the Job Retention Scheme are welcome and necessary in the current economic climate. He should take this same approach as we enter the crucial recovery phase of the crisis.”

Photo by Arturo Rey on Unsplash

Contact Gi National
Email us: news@gi-media.co.uk

editor